Which of the following doesn't correctly describe preferred stock?
A)Preferred stock has a higher priority status relative to common stock.
B)Preferred shareholders are guaranteed to receive dividends.
C)Preferred stock usually does not carry voting rights.
D)Preferred stockholders receive dividends in arrears only if the shares are cumulative.

Question

Quizplus · Accepted Answer

Preferred shareholders only are entitled to dividends when they are declared. There is no guarantee they will receive dividends.

Which of the Following Doesn't Correctly Describe Preferred Stock